The months ahead will be difficult and nerve wracking for the international corporate treasurer and for the professional currency dealer as the timing of interest rate changes make decision-making difficult. Interest rate changes and interest rate expectations will be the main focal point everywhere. There is a lot of talk about the US Fed and the Bank of England raising rates by mid-year. Yet, both the US and the UK economies are not yet ready for such a move.

The ECB’s QE is beginning to bite and is squeezing everyone out of the market. Much of the extra cash generated by the European QE is flowing into the US, and partly the UK, in anticipation of higher returns. As a result, the dollar is going up and the pound remains quite steady.

The unresolved Ukraine problem and the various other trouble spots around the globe remains a source of worry in the markets. The upshot of all this, the only clear direction in the markets is continued US dollar strength.